Security Deposits in New York

New York's 2019 HSTPA rewrote deposit law — and built in a drop-dead forfeiture trigger that hands the full deposit back to the tenant whenever a landlord bungles the procedure. The statute is unusually tenant-favorable, but only if you use the leverage points correctly.

GOL § 7-108(1-a)(a) — the 1-month cap

No landlord of any residential rental unit may collect a security deposit exceeding one month's rent. No "last month's rent." No pet deposits. No key fees. No move-in fees beyond actual application costs capped at $20 under GOL § 238-a. Amounts collected in violation are recoverable in full and trigger statutory damages.

GOL § 7-108(1-a)(e) — the 14-day return clock

• Within 14 days after the tenant vacates, the landlord must return the deposit AND provide an itemized statement of any deductions.
• Both requirements are cumulative — missing either one triggers forfeiture.
• Day 1 is the day after move-out. Weekends and holidays count.

THE FORFEITURE TRIGGER — GOL § 7-108(1-a)(g)

This is the killer provision. If the landlord fails to provide the itemized statement and return within 14 days, the landlord forfeits any right to retain any portion of the deposit — regardless of legitimate damage. The full deposit must be returned.

"In any action or proceeding... the burden shall be on the landlord to prove the reasonableness of the amount retained. If the landlord fails to provide the tenant with the statement and deposit as required, the landlord shall forfeit any right to retain any portion of the deposit." — GOL § 7-108(1-a)(g)

Pre-move-out inspection right — GOL § 7-108(1-a)(d)

• Between 1 and 2 weeks before the lease ends, tenants have the right to request a walkthrough inspection with the landlord.
• Landlord must provide written notice of right to inspect with reasonable prior notice.
• If damage is identified, the tenant has the right to cure before move-out and avoid deduction.
• Failure of the landlord to offer this inspection (in NYC post-HSTPA) is additional evidence of bad faith.

Burden of proof — GOL § 7-108(1-a)(f)

In any action to recover the deposit, the landlord bears the burden of proving the reasonableness of any deductions. The tenant need only testify that they did not cause damage; the landlord must produce receipts, contractor invoices, and photographs.

Deposit holding rules — GOL § 7-103

• Deposits from buildings of 6+ units must be held in an interest-bearing NY banking institution account.
• Tenant must be notified in writing of the bank's name and address.
• Interest (less 1% admin fee) belongs to the tenant and is paid annually.
• Deposits cannot be commingled with the landlord's personal funds — commingling alone supports forfeiture and punitive damages.

Small claims apparatus

• NYC Small Claims: Jurisdictional cap $10,000. File in the Civil Court of the appropriate borough (Manhattan, Bronx, Brooklyn, Queens, Staten Island). Filing fee: $15 (up to $1,000) or $20 (over $1,000).
• Outside NYC Small Claims (Town/Village Justice Courts): Cap $3,000. Filing fee: $10.
• City Courts (Buffalo, Rochester, Syracuse, Yonkers, Albany, etc.): Cap $5,000. Filing fee: $15–$20.
• eFiling: NYC civil court: iapps.courts.state.ny.us/nyscef. Outside NYC, check with the local court clerk — eFiling availability varies.
• Fee waiver: CPLR § 1101 poor person order. File an affidavit of indigency; fees waived if granted.
• No attorneys in small claims (NYC Civil Court Act § 1804): Parties may appear pro se. This levels the playing field for tenants.

AG Tenant Protection Unit — parallel pressure

The NY AG's Tenant Protection Unit investigates systemic landlord misconduct. File at ag.ny.gov/tenant-protection-unit or (800) 771-7755. Patterns of withheld deposits across multiple tenants can trigger AG investigations, subpoenas, and restitution.

Attorney's fees — Real Property Law § 234

If the lease contains any provision awarding attorney's fees to the landlord, § 234 reciprocally entitles the tenant to fees when the tenant is the prevailing party. Check your lease — almost every standard NY form lease includes landlord fee provisions, which automatically arm you with reciprocal fees.

Tactical sequence

1. Request the pre-move-out inspection in writing 10–14 days before lease end.
2. Photograph/video every surface at move-out with timestamps.
3. Provide a written forwarding address via certified mail before move-out.
4. Wait 15 days after move-out. If no itemized statement and no deposit arrived, the landlord has forfeited under § 7-108(1-a)(g).
5. Demand letter citing § 7-108(1-a)(g) forfeiture, giving 7 days. Include a copy of your forwarding address receipt.
6. File in small claims (NYC Civil Court or local Justice Court). Request attorney's fees under § 234 if lease contains a landlord fee clause.

Statute of limitations

6 years for contract-based deposit claims (CPLR § 213(2)).